Amazon’s entry into the healthcare sector feels inevitable. Industry analysts and executives have long tipped the online giant to make a bold move and disrupt the sector. Although we’ve seen signs of Amazon entering into the pharmaceutical market – nothing concrete suggested a launch into healthcare. However, Amazon has given its clearest indication yet that it believes the sector is ripe for disruption, announcing it is entering an alliance with Berkshire Hathaway and JPMorgan Chase to form an independent healthcare company for their employees in the United States.

The three corporate giants will join forces in an attempt to reduce the healthcare spending of more than one million employees and their families.

Amazon’s healthcare dry run?

The New York Times suggests the move is primarily born out of frustration at the structure of the nation’s health care system and the ever-increasing cost of medical treatment. But it also mentioned that companies are known to “use their own employees as a testing ground for future initiatives.” In other words, there’s a feeling that this could be Amazon’s dry run at the health care sector.

JP Morgan CEO James Dimon was quick to stress to the company’s healthcare clients that the new venture will not become their rival. But is it this Amazon’s big opportunity to pick up some value industry insight and leverage?

Few details, plenty of expectations

Setting the speculation aside, the initiative is remarkable – bringing together Dimon, Warren E. Buffett (Berkshire Hathaway) and Jeff Bezos (Amazon) – even if the details on how the three partners plan to overhaul their employees’ existing health coverage aren’t completely clear at this stage.

While the companies confirmed that the initiative would be “free from profit-making incentives and constraints,” it didn’t go as far to clarify whether that meant they would create a non-profit organization.

The lack of detail has opened the door for people to theorize what the partnership might involve. One suggestion is that the companies could create an online healthcare dashboard that connects employees with the closest and best doctor, depending on their symptoms. Another is that they will transform the process of doctor appointments by making it more like booking a restaurant reservation on OpenTable.

If the initiative is successful in modernizing and driving down the costs of healthcare as planned, it could shake-up the traditional system once and for good. But even Bezos is “open-eyed about the degree of difficulty” of being able to making the sort of waves he’s used with his disruptive ventures.

What do you think will be the impact of this new initiative? How can Amazon use its disruptive capabilities for the good of the healthcare sector?

Author: Ryan Clark

Ryan Clark is a strategic client director working on partnerships between CCC and commercial clients. Ryan has been with CCC over five years and has worked in rightsholder relations and business development prior to joining the strategic client group. Ryan enjoys spending time with his family, and following Bruins hockey and Ireland rugby in his time away from work.